K.R. Shriram, J.@mdashThe order and reliefs sought by the Plaintiff in this Notice of Motion are as under:
(a) For an order and direction directing the 2nd Respondent to supply the 1st Defendant vessel and her crew, the 1st Respondents, with essential supplies and fuel, at the 2nd Respondents'' cost and expense, from the date of the order till judicial sale of the vessel.
(b) For, in the alternative to prayer (a), an order and direction directing the 2nd Respondents to share on a 50-50 basis, alongwith the Plaintiff, costs of such supplies as mentioned in prayer clause (a).
(c) For an order and direction that the Plaintiff/2nd Respondents are entitled to recover such amounts paid by them towards provision of essential supplies and fuel to the vessel as a first claim and/or as sheriff''s expenses from the 1st Defendant vessel and/or her sale proceeds and/or her owners, i.e., the 2nd Defendants.
(d) For an order and direction that the Reserve Bid Price of INR 15 crores set by the Hon''ble Court for sale of the Defendants vessel as per order dated 10th February 2011 be reduced.
(e) For any other order as this Hon''ble Court may deem fit and proper having regard to the facts and circumstances of the present case.
(f) Ad-interim reliefs in terms of relevant prayer clauses above.
(g) For costs.
Before I consider the relief sought by the Plaintiff, it is necessary to narrate the background of this matter.
2. The Plaintiff was the owner of a cargo that was carried by the 1st Defendant vessel. The vessel was arrested in South Africa and there were many claimants against the vessel. Though the Plaintiff was only the owner of the cargo onboard the vessel and was not legally obliged to pay the parties who had a claim against the vessel, the Plaintiff paid off all the claimants in South Africa. It was a commercial decision that the Plaintiff took as the value of the cargo on board the arrested vessel was substantial comparatively. After the Plaintiff paid off the various claimants, the vessel sailed from South Africa and arrived at Visakhapatnam and discharged the cargo. It is also the case of the Plaintiff that the master of the vessel demanded large sums of money even to open the hatches and the Plaintiff had paid off the master, which again legally the Plaintiff was not obliged to pay. Once again it appears to be a commercial call, assuming the Plaintiff has paid, because when the Plaintiff had obtained an order of arrest, nothing prevented the Plaintiff from seeking a direction to the Master to discharge the cargo. Eventually, as the owners of the vessel did not come forward to furnish the security or bail, the vessel was sold pursuant to the orders of this Court and the sale proceeds are deposited with the Prothonotary and Senior Master of this Court.
3. In the meanwhile, despite the Owner not paying the Plaintiff''s claim in the suit and the Master twisting the arm of the Plaintiff before discharging the cargo, the Plaintiff had approached this Court with an application bearing Notice of Motion No. 3558 of 2010 seeking reliefs similar to the reliefs sought in the present Notice of Motion. That Notice of Motion came to be rejected by this Court by an order and judgment dated 24th October 2013. The Plaintiff had approached this Court alleging that the owner of the vessel had abandoned the vessel and that the crew members were suffering great hardship and the plaintiff couldn''t see the condition in which the Master and crew of the vessel were and wanted to assuage their condition. The Plaintiff, though, had claims running into crores of rupees against the vessel, decided to and volunteered to fund the expenses of the crew on board the vessel. This is despite the fact that the Plaintiff was not in law or contractually bound or liable to do so. It was a very difficult proposition to accept. This Court, hence, on an application made by the Plaintiff at the ad-interim stage in Notice of Motion No. 3558 of 2010, made it absolutely clear that (a) it is the Plaintiff who had volunteered to incur the expenses; (b) it is the Plaintiff who desired to make the payments; (c) at the request of the Plaintiff, the Plaintiff was given liberty to incur the expenses which the Plaintiff could realize in accordance with law; and (d) any payment that the Plaintiff should make, it should be made through the office of the Sheriff, Mumbai. Despite the orders of this Court, the Plaintiff consciously disregarded the orders of this Court. The Plaintiff did not incur any costs through the office of the Sheriff Mumbai but claimed to have paid directly to the crew members. The Court directed the costs to be incurred through the Sheriff of Mumbai is because there will be proper check and control by the office of the Sheriff which fall under the control of the court. In other words, the court would be monitoring the expenses trough the office of the Sheriff. When the Notice of Motion No. 3558 of 2010 was heard no explanation was forthcoming as to why the alleged expenses were not incurred through the Sheriff''s office despite being directed to do so. It is pertinent to mention that this is not the only time the Plaintiff disobeyed/disregarded the orders of this Court.
4. When the present Notice of Motion was taken out, the Sheriff of Mumbai filed a report bearing No. 8 of 2011 dated 18th April 2011 in this Court and prayed for directions as under:
(i) That this Hon''ble Court may direct the Plaintiff in this suit and Plaintiff in Admiralty Suit No. 12 of 2011 to carry out joint inspection of the vessel M.V. Glory-I and to find out as to whether necessary supplies, MGO and fresh water are required to be provided on board the vessel as demanded by the Master of the vessel.
(ii) That the Hon''ble Court may direct both the Plaintiff to make necessary arrangement of supplies through local agent in case of emergency.
(iii) That the Hon''ble Court may direct both the Plaintiff to deposit Rs. 15,00,000/- (Rupees Fifteen Lakhs only) in the office of the Sheriff of Mumbai for making payment to the agent for making supplies on board the vessel.
(Emphasis supplied)
(iv) That any other order as this Hon''ble Court may deem fit and proper.
5. This Hon''ble Court, on 20th April, 2011, passed the following order on the Sheriff''s Report:-
If there is any dispute between the Plaintiffs in two suits regarding the condition of the vessel, the Sheriff is bound to consider the same and comply with the order dated 7th April, 2011. In view of the urgency involved, it is imperative that the parties comply with the order and the directions of the Sheriff issued to them including regarding payment forthwith.
(Emphasis supplied)
6. Pursuant thereto the Dy. Sheriff of Mumbai called upon the Plaintiff in this suit and the Plaintiff in Admiralty Suit No. 12 of 2011 (second Respondent herein) to deposit sum of Rs. 15 Lakhs each forthwith.
7. The second Respondent herein filed an Appeal before the Division Bench of this Hon''ble Court impugning the ad-interim orders dated 7th April and 20th April, 2011. The Division Bench of this Hon''ble Court directed the Appellants (the second Respondent herein) to deposit a sum of Rs. 5 Lakhs, as against Rs. 15 Lakhs and the impugned order in so far as the Appellant was concerned was stayed. Pursuant to the said order the second Respondent deposited sum of Rs. 5 Lakhs with the Sheriff of Mumbai.
8. The Appeal filed by the second Respondent was disposed of by the Division Bench of this Hon''ble Court by an order dated 8th June, 2011. The Appeal Court disposed of the Appeal by observing "in view of the fact that the first Defendant vessel itself was sold and therefore no further charges were required to be paid". These facts are not in dispute.
9. Though the second Respondent had complied with the order of this Court, the Plaintiff had not complied with the order dated 20th April 2011 read with order dated 7th April 2011. The Plaintiff did not deposit with the Sheriff''s office the amount of Rs. 15,00,000/-. The Plaintiff, however, deposited only a sum of Rs. 7,75,000/- with the Sheriff''s office. The Deputy Sheriff of Mumbai filed a further report No. 1 of 2014 in which he confirmed that the Plaintiff had deposited only Rs. 7,75,000/- and further explained that they accepted this amount only because the Plaintiff''s Advocate had informed the Sheriff''s office that the balance amount to be deposited has been expenses towards supplies of necessaries effected directly by the Plaintiff to the defendant vessel and further assured that he would provide details of such supplies in due course but no such details have been submitted at all. Therefore, it is rather obvious that the Plaintiff has once again disobeyed and disregarded the directions of this Court. Shri Ramabhadran, counsel for the second respondent submitted that in view of the Plaintiff having disobeyed/disregarded the orders of this court in Notice of Motion No. 3558 of 2010 and in this Notice of Motion, the Plaintiff should not be even heard by this court.
10. Mr. Shanker, Counsel for the Plaintiff submitted that the argument of the second respondent that the Plaintiff has not complied with the order of this court in not depositing Rs. 15 Lakhs has to be disregarded because (a) it was not made in writing any time before and now being raised orally for the first time; (b) it does not find place in the second respondent''s affidavit dated 7th January 2014 in the present notice of motion and (c) it was first raised across the bar on 10th January 2014. He further submitted that the Plaintiff in any event has complied fully with the order of the Hon''ble Court because:
(i) The Sheriff''s Report dated 18th April 2011 prays for:
...b) that the Hon''ble Court may direct both the plaintiff to make necessary arrangement of supplies through local agent in case of emergency;
c) that the Hon''ble Court may direct both the Plaintiff to deposit Rs. 15,00,000/- (Rupees Fifteen Lakhs only) in the office of Sheriff of Mumbai for making payment to the agent for making supplies on board the vessel;
(ii) The order dated 20th April 2011 only states, "In view of the urgency involved, it is imperative that the parties comply with the order and the directions of the Sheriff issued to them including regarding payment forthwith." But the order does not state that INR 15,00,000/- is to be paid.
(iii) The order directs the Plaintiff to provide supplies to the vessel directly (in accordance with prayer (b) of the Sheriff''s Report) and to make payment to the Sheriff of what the Sheriff may require.
(iv) In accordance with the order, the Plaintiff, on 18th May 2011, made payment to the Sheriff of INR 7,75,000/-. Further, the Plaintiff was also making supplies directly to the vessel on account of the urgency, as per the order. The covering letter under which the Plaintiff made payment to the Sheriff states, "Please find enclosed a demand draft bearing number 478748, dated 29th April 2011 issued in your favour in the sum of INR 775,000/-. The demand draft has been furnished by the Plaintiff towards maintenance and preservation of the Defendant vessel. The balance amount to be deposited by the Plaintiff has been expenses towards supplies of necessaries (inter alia MGO and provisions) effected directly by the Plaintiff to the defendant vessel, on account of the urgency of the situation. Details of such supplies will be provided to you in due course.
(v) The Plaintiff has, as promised, provided details (and original documents) of the supplies made directly to the vessel in its Notice of Motion No. 3558 of 2010. In other words he admits the Plaintiff has not provided details to the sheriff''s office as undertaken by them.
(vi) That the amount of INR 7,75,000/- was all that was required by the Sheriff is evident from the fact that no further demand for any balance amount has come from the Sheriff. If the Sheriff required more money, he would have asked the Plaintiff for it. The Sheriff''s initial directions, thus, stood modified insofar as his requirement was met by INR 7,75,000/-. Thus, the Plaintiff has fully complied with this Hon''ble Court''s order to comply with the directions of the Sheriff.
11. He further submitted that the second respondent itself has admitted, on 25th June 2011, that the Plaintiff has complied with all directions as regards payment, since the order dated 25th June 2011 passed by the Hon''ble Court records, "The learned Counsel (for the Mortgagee Bank) submits that in view of the above development no further charges are required to be paid by the appellants (the Mortgagee Bank) and respondents (the Plaintiff)..."
Even the Sheriff''s Report dated 10th January 2014 does not allege any breach, by the Plaintiff, of the directions issued by the Sheriff''s office.
12. As such, the oral submission of the second respondent that the Plaintiff is in breach of the Hon''ble Court''s order and, therefore, should not be given an opportunity to be heard deserved to be disregarded in limine.
13. In my opinion, Mr. Shankar''s arguments cannot be accepted. They are nothing but fanciful. The order of 20th April 2011 read with order dated 7th April 2011 is plain and simple and the Plaintiff and the second respondent had no option but to pay the Sheriff of Mumbai Rs. 15 Lakhs (which in the case of the second respondent was reduced to Rs. 5 Lakhs by the division bench in appeal) and not indulge in doing things contrary to what the order directs. Moreover, the Court in its order dated 20th April 2011 passed this direction in view of the urgency. Against this, the Sheriff had only sought for necessary arrangement of supplies in case of emergency. Neither the Sheriff nor the Plaintiff have alleged that there was an emergency or what was the emergency and when did the emergency situation happen. Emergency means crisis or disaster or tragedy or catastrophe or calamity or upheaval and there was no such situation. In any event, the Sheriff has not and could not have modified the orders of this Court as the Sheriff''s initial requests became an order of this Court by virtue of the order dated 20th April 2011.
14. The explanation of the Plaintiff for its failure to comply with the orders of this Court was strangely and initially one of defiance. However, as the matter progressed, the Plaintiff''s counsel expressed remorse by closing his submissions on the topic that the amount expended by the Plaintiff on maintaining the vessel was about INR 1 crore and to deprive the Plaintiff of it for non-payment of INR 7,25,000/- would be inequitable and unjust. Any breach was unintentional. The Plaintiff honestly believed that it had acted fully in compliance with the Court''s order. The Plaintiff is agreeable to make payment of the INR 7,25,000/- now, for whatever purpose it might serve, if it is given a right to be heard. In view of this, the Plaintiff''s action or breach was condoned and the Plaintiff was heard.
15. Now dealing with each of the reliefs sought in the Notice of Motion, Prayer (a) and (b) can be dealt with together:
(a) For an order and direction directing the 2nd Respondent to supply the 1st Defendants vessel and her crew, the 1st Respondents, with essential supplies and fuel, at the 2nd Respondents'' cost and expense, from the date of the order till judicial sale of the vessel.
(Emphasis supplied).
(b) For, in the alternative to prayer (a), an order and direction directing the 2nd Respondents to share on a 50-50 basis, alongwith the Plaintiff, costs of such supplies as mentioned in prayer clause (a).
(Emphasis supplied)
Since the vessel has already been sold, prayer clause (a) is not relevant at all at this stage.
The court had directed the plaintiff and second respondent to deposit Rs. 15 Lakhs each with the Sheriff of Mumbai. The second respondent as mentioned above complied but the Plaintiff did not. No order to supply any provisions was passed by the court. Moreover, the Sheriff has not utilized any amount from the deposit made by the Plaintiff or the second respondent. Hence these amounts have to be returned to the respective parties. In any event, since the vessel has already been sold, nothing remains in prayer clause (b) as well.
16. As regards prayer clause (d) "...the vessel having been sold" this relief is also now redundant. Likewise, prayer clauses (e) and (f) also need not be dealt with. What remains to be considered are prayer clauses (c) and (g). Prayer clause (c) reads as under:
(c) For an order and direction that the Plaintiff/2nd Respondents are entitled to recover such amounts paid by them towards provision of essential supplies and fuel to the vessel as a first claim and/or as sheriff''s expenses from the 1st Defendant vessel and/or her sale proceeds and/or her owners, i.e., the 2nd Defendants.
17. It is the Plaintiff''s case that the documents on which the Plaintiff relies upon to support its claim of having incurred the alleged expenses and for payment out are those relied upon in the now disposed notice of motion no. 3558 of 2010. The Plaintiff claim to have spent Rs. 75,00,000/- and also paid wages aggregating to US$ 334,045/- to the crew. As regards the supplies allegedly made to the vessel including essentials and fuel, when the Plaintiff had filed and moved for ad-interim reliefs in Notice of Motion No. 3558 of 2010, the Court had refused to grant the reliefs as sought by the Plaintiff. The Court made it very clear that it is the Plaintiff who had volunteered to incur the expenses and it is the Plaintiff who desired to make payments and at the request of the Plaintiff, the Plaintiff was given liberty to incur the expenses, which the Plaintiff could realise in accordance with law. The plaintiff was also directed that the alleged expenses should be made through the office of the Sheriff, Mumbai. The Plaintiff''s entitlement to reimbursement including questions of priority in respect of such sums that the Plaintiff may make, the Court said, could be decided later when the motion was finally heard. The notice of motion no. 3588 of 2010 was finally heard and rejected. The admitted fact is the Plaintiff disregarded the orders of the Court and did not incur any alleged cost or expenses through the office of the Sheriff of Mumbai but claimed to have paid directly to the crew members. The plaintiff was directed to take such steps to amend its claim in the suit if permitted. Therefore, actually nothing survives in the present notice of motion.
18. As regards the wages aggregating to US$ 334,045/- to the crew, it rather evident that the nature of the Plaintiff''s claim is suspicious. The Plaintiff has in the affidavit in support of the Notice of Motion claimed that they have incurred sum of US $ 334,045/- towards payment of wages and the purported amount is claimed to have been paid on or about 7th July, 2010 [the plaintiff was not obliged to make any such payment]. It is significant to note that the very same amount has been claimed by the Plaintiff in the Plaint and also in the Notice of Motion No. 3558 of 2010. It is further significant to note that the Master and the crewmembers have filed their suit claiming wages and obtained order of arrest from the High Court of Andhra Pradesh at Hyderabad on 21st September, 2010 and consequently while confirming the sale of the vessel, this Court by an order dated 20th May, 2012 directed the Sheriff of Mumbai to deposit a sum of Rs. 76,04,464/- in the High Court of Andhra Pradesh. Therefore it is inconceivable that the Plaintiff herein have paid the wages to any crewmembers when the Master and the crewmembers themselves have filed the suit seeking their wages and the amount was directed to be deposited in the Registry of High Court of Andhra Pradesh towards their claim.
19. It is also the case of the Plaintiff that it is the obligation of the Plaintiff in every matter to maintain the vessel till the date of sale of the vessel. In support of this submission, the Plaintiff''s counsel submitted that the Hon''ble Division Bench has held, in para 18 of its order dated 30th November 2011 in Appeal No. 758 of 2011 in Notice of Motion No. 1817 of 2011 in Admiralty Suit No. 24 of 2011[BOS ANGLER], "....The appellants have continuously incurred the maintenance cost of the ship. Of course, since they have got the ship arrested they are statutorily required to incur that liability." Relying on this the Plaintiff''s case is that Indian law recognizes the duty on an arresting plaintiff to maintain the vessel and that the said party is entitled to expeditiously recover moneys spent on maintenance of the vessel as Sheriff''s expenses.
20. The Plaintiff''s counsel also relied upon The World Star [1987] 1 Lloyd''s Rep. 455 and submitted that when a mortgagee bank opposed the application of the first arresting party to withdraw the said amounts and contended that the party was only entitled to do so after obtaining judgment (i.e., upon enforcing an arbitration award), it was held "...If that is the correct rule it follows that the Plaintiff will have to go through the lengthy and expensive process of an arbitration in order to obtain the award of the arbitrators and then convert that award into a judgment upon which they will make no recovery, because the whole of the fund in Court will be taken by the mortgagees. Very large sums of money will be expended in legal costs and the fees of expert witnesses and of the arbitrators, all of which will be wasted. If the Rules of the Supreme Court and the Practice of the Admiralty Court produce that result, it is an unfortunate and unjust state of affairs.
It is apparent that the aim of the mortgagees is to make the task of the Plaintiff so expensive that they will desist from their efforts to make recovery of the money which they have expended, with the result that the amount available to the mortgagees will be larger."
21. According to the Plaintiff, the same logic is applicable here as the Mortgagee Bank, who stood by without doing anything to preserve the vessel whilst she was in distress, is now seeking to deprive the Plaintiff of amounts expended by it in good faith. The Plaintiff should not be made to wait till it obtains judgment.
22. The Plaintiff further submitted that prior sanction of the Court is not a pre-requisite of incurring the Sheriff''s expenses and it has not been averred by the Mortgagee Bank that prior sanction of the Court is a pre-requisite to incurring Sheriff''s expenses. Mr. Shanker further submitted that the suggestion that any Sheriff''s expenses incurred without the prior sanction of the Court should be disallowed is absurd. According to Mr. Shanker, all that the Plaintiff requires to show is that (a) there was urgency, (b) the supplies were made and (c) the Plaintiff has acted in good faith. And the Plaintiff has shown all three in the present case and there is no suggestion to the contrary except some vague unsupported allegation of collusion between the Plaintiff and the ship-owner by the mortgagee bank. He said in para 18 of its order dated 30th November 2011 in Appeal No. 758 of 2011 in Notice of Motion No. 1817 of 2011 in Admiralty Suit No. 24 of 2011 [BOS ANGLER], the division bench has only held "..The appellants have continuously incurred the maintenance cost of the ship. Of course, since they have got the ship arrested they are statutorily required to incur that liability." Therefore as there is no mention of any prior sanction being required, no prior sanction is required.
23. Mr. Shanker also relied upon paragraph 17 of The Falcon, [1981] 1 Lloyd''s Rep. 13. He submitted that in the Falcon, an amount of US$ 211,783.16 was incurred by the arresting party, without any prior sanction. He relied on Paragraph 17 which provides as under:
The proceeds of sale of a ship which has been sold by order of the Court should be used, first, to pay the Admiralty Marshal''s charges and expenses, secondly, to reimburse the plaintiff or Plaintiff who has or have incurred expense in preserving the property by arresting the ship and maintaining that arrest. Those expenses will of course include the necessary costs of that plaintiff up to the moment of that arrest. If there is only one action the plaintiff in that action must obtain judgment before he can recover the expense of arrest. If there is more than one action and if the ship is appraised and sold by an order made in a second or subsequent action, the plaintiff in the first action should make application to the Court for reimbursement of the expenses of preserving the property. The Court will so order unless he has acted in bad faith.
According to Mr. Shanker, as there is no mention in the judgment in which US$ 211,783.16 was directed to be reimbursed as maintenance expenses of any prior sanction having been taken, no prior sanction was required.
24. The other English judgment on which Mr. Shanker relied upon was the World Star, [1987] 1 Lloyd''s Rep. 455, to submit that no prior sanction was required.
25. The reliance by Mr. Shanker upon the Judgment of the Division Bench of this Court in the case of BOS ANGLER is misplaced. Observation of the Division Bench of this Court in the said Judgment is neither ratio nor obiter dicta. There was no issue raised before the Appeal Court in the BOS ANGLER case in regard to maintenance of the vessel. The only issue which arose before the Appeal Court in the Judgment cited by the Plaintiff was whether there was a justification for re-auction of the vessel for the second time even if the minimum bid price has not been received. There was no other issue before the Division Bench and therefore the Court had no occasion to decide any other issue much less the issue as to whether the party who had arrested the vessel has to bear the expenses for maintenance of the vessel or not.
26. It is trite that a Judgment becomes a binding precedent only in respect of the issues decided and an odd observation of the Court when such issue was not raised at all does not become a binding precedent. In this regard the Judgment of the apex court in the case of
12.....Reliance on the decision without looking into the factual background of the case before it is clearly impermissible. A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving judgment that constitutes a precedent. The only thing in a Judge''s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates (i) findings of material facts, direct and inferential. An inferential finding of facts is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. The enunciation of the reason or principle on which a question before a Court has been decided is alone binding as a precedent. (See: State of Orissa v. Sudhansu Sekhar Misra and Union of India v. Dhanwanti Devi). A case is a precedent and binding for what it explicitly decides and no more...
27. The Plaintiff has not shown any rule or statute which casts an obligation upon the arresting party to maintain the Ship. At the same time I see no injustice in requiring a plaintiff who has arrested a ship to pay all the expenses of the arrest and maintenance of the arrest until such time the plaintiff released his arrest. But these are "expenses of the arrest" and "maintenance of the arrest". Certainly these cannot be meant to include maintenance of the ship or pay the wages of the crew or provide food and supplies to the crew. The arresting plaintiff need not do any of these. There is no such requirement in our law or the rules.
28. It is for that reason generally only one arrest is made at a time of a ship. If any other party has a claim against the ship that is already under arrest then the second party files a caveat against the release of the ship, in case the party who had first arrested the ship has its claim settled and/or secured and the ship is ordered to be released. This caveat is filed for that party to apply to the Court, for re-arrest of the ship in suit if the first arrest is vacated. Even in cases where a second arrest is effected, the first arrester can release his arrest and enter a caveat against release so that he may be able to save the cost of appraisement, advertising and sale of the ship, particularly, where the first arrester is say a crew who is claiming for injury or crew''s dependents for death/injury compensation or wages and they may find it difficult to meet the expenses. Therefore, to say that all parties arresting should come together and maintain the vessel cannot be accepted.
29. Even if I were to accept (which I don''t in any case) the Plaintiff''s case that it is the duty of the arresting party to incur such expenses, in this particular case, this Hon''ble Court by an order dated 20th April, 2010 in notice of motion 3558 of 2010 had made it clear that only payment which could be made directly to the concerned parties is for the month of December, 2010 and thereafter any payment should be made through the Office of the Sheriff of Mumbai. Admittedly the Plaintiff has disregarded this direction of the court and could even be said to have acted in bad faith. Therefore the Plaintiff is not entitled to make any claim in regard to the purported supplies to the first Defendant vessel having allegedly made directly to the parties involved.
30. As regards Plaintiff''s reliance upon the decision of the English Court in the case of The Falcon the facts of the case to extent relevant are as under:
(a) On or about March 30, 1979 the Plaintiff issued Writ and on April 3, 1979 applied for issue of warrant for the arrest of Falcon. The warrant was issued on April 4 and executed by the Admiralty Marshal. The Plaintiff had given an undertaking to pay on demand the fees of, and all expenses incurred by the Admiralty Marshal in respect of the vessel under arrest.
(b) On May 16, 1979 Mr. Justice Sheen ordered Falcon to be appraised and sold by the Admiralty Marshal pendente lite and on July 11, gave judgment in favour of the mortgagees. The vessel having been sold at US $ 5,145,900/- it was apparent that any creditor who has claim ranked after the claim of the mortgagee would not recover any part of his claim.
(c) On October 30, the Admiralty Marshal wrote to the Plaintiff advising them that their share of expenses incurred for maintaining Falcon under arrest from April 4 to May 16 amounted to US $ 3828.96.
(d) The Plaintiff applied for an order that they be not charged with any of the expenses of maintaining the custody of Falcon while she was under arrest at Southampton or that the Plaintiff pay such proportion of the expenses of custody as their claim bore to the claim of mortgagees and that such proportion of the expenses be recoverable from the proceeds of sale of Falcon as the first priority charge.
(Emphasis supplied)
31. Two things emerge from the facts of this case. Firstly, it appears as per English practice the Plaintiff who has obtained a Writ and warrant of arrest against the vessel had to furnish an undertaking "to pay on demand the fees and all expenses incurred by the Admiralty Marshal in respect of the vessel under arrest". There is no Rule under Indian law which requires the Plaintiff to provide such an undertaking in favour of the Sheriff of Mumbai to pay all expenses incurred in respect of the vessel under arrest. In fact the Plaintiff has not furnished any such undertaking in favour of the Sheriff of Mumbai or made any payment except Rs. 7,75,000/- to the Sheriff of Mumbai. This amount, it is the plaintiff''s case has not been expended by the sheriff. Therefore any expenses being claimed as "Sheriffs expenses" do not arise.
32. Secondly it is very clear from the Judgment that Admiralty Marshal had incurred the expenses of custody of Falcon and therefore the Admiralty Marshal proposed to charge one-half of the expenses of custody of the Falcon. The relevant portion of the Judgment at page 16 is reproduced hereunder:-
Accordingly the rules of the Supreme Court provide that a Plaintiff who arrests a ship must give an undertaking to pay on demand the fees of the Marshal and all expenses incurred by him in respect of the arrest. It has become the practice of the Admiralty Marshal to divide the expense of keeping a vessel under arrest equally between all parties who have arrested the vessel.
(Emphasis supplied).
33. Therefore admittedly in the case of Falcon the plaintiff had given an undertaking to the sheriff and expenses were incurred by the Admiralty Marshal. Hence the question arose who would bear the expenses of maintenance of the arrest when more than one party has obtained the order of arrest. In the present case there is no such undertaking given by the plaintiff and the sheriff has not claimed any expenses from the plaintiff.
34. Admittedly the expenses claimed by the Plaintiff in this case are not expenses that were incurred by the Sheriff of Mumbai. The expenses the Plaintiff allegedly claims to have incurred certainly would not fall within the ratio of the judgment in the case of Falcon.
35. Likewise, the decision of English Court in the case of the "World Star" also deals with the situation where by it would be evident that the amounts which were sought to be recovered in priority to all other claims from the sale proceeds, were amounts paid by the Plaintiff "to the Admiralty Marshal at his request".
36. As regards the submission of the Plaintiff''s counsel that expenses in any case atleast are to be shared equally between the arresting Plaintiffs and his reliance upon the English Court Judgment in the case of "Rubi Sea" (1992) 1 LLR 634 is also misplaced. That case also proceeded on the basis that Order 75 Rule 10(3) of the English Court provides warrant of arrest will not be executed until there has been lodged in the Marshal''s office an undertaking to pay on demand the fees of the Marshal and all expenses incurred by him in respect of the arrest of the ship and care and custody of it while under arrest".
37. Similarly, last of the Judgment of the Court in South Africa in the case of MT Argun relied upon by the Plaintiff would clearly confirm that in that case the expenses have been incurred by Sheriff under their statute and the question which arose before the Court is the manner in which such expenses has to be apportioned between the various parties.
38. In the circumstances none of the cases cited by the Plaintiff has any bearing on the facts of the present case. Moreover, this Court had made it clear to the Plaintiff that the amount, if any, has to be incurred through the Office of the Sheriff of Mumbai. The Plaintiff has, it is rather obvious from their non-compliance of two orders of this court, acted in bad faith and deliberately chosen not to deposit the amount with the Office of the Sheriff of Mumbai.
39. Regarding the maintenance of the vessel, the Bombay High Court (O.S.) Rules, Part III, does not provide anywhere as to who should maintain any vessel. In fact, in my opinion, the Plaintiff need not maintain the vessel at all. If the owner of the vessel fails to put up or furnish bail or security for release of the vessel within say three days from the date of arrest, the Plaintiff can certainly take out a Notice of Motion on the expiry of three days for appraisal and sale of the vessel. The period of three days is not provided anywhere in the Rules but is a reasonable period for the Plaintiff to expect the owner to put up bail. Rule 948 of the Bombay High Court (Original Side) Rules provides as under:
948 Application for sale of arrested property:--
In a suit in rem if the property proceeded against has been arrested, the plaintiff may, at any time after service of the Writ of Summons upon the defendant, apply to the Court by Notice of Motion for an order that the arrested property be sold by the Sheriff and the sale proceeds be paid into the registry to the credit of the suit. The Court may make such order on the application as it may think fit.
The Rule says ".........the Plaintiff may, at any time..................". Each day of detention of a vessel causes huge amounts of loss to the owner and certainly the owner, if he really is interested in releasing the vessel, would enter appearance and put up a bail without prejudice to his rights and contentions or atleast contest the arrest. If the owner does not do so, it could be reasonably presumed that the owner is not interested in getting the vessel released. At that stage or earlier or at any time, the Sheriff may apply for directions under Rule 947 of the Rules. Rule 947 provides as:
947 Sheriff may apply for directions:-The Sheriff may at any time make a report to the Court and apply for directions with respect to property under arrest in a suit. The Court may direct notice of the application to be given to any person concerned with the property before passing orders on the report.
40. The application under rule 948 by the Plaintiff is also required to be taken as a matter of urgency because once the owner does not take steps to release the vessel, it is possible he may stop paying the wages of the master and crew, stop supplying food and other articles to the vessel and also fuel and bunkers necessary for running the machinery/generators on board the vessel. The supply on board may also get exhausted very soon and it will lead to absolute chaos. Therefore, when the Plaintiff takes out an application for appraisal and sale of the vessel, the Court also hears the Sheriff''s application for directions and directs the Plaintiff to fund the Sheriff a reasonable amount to cover the cost of appraisal/valuation of the vessel and advertising the sale/auction of the vessel. This cost which is paid to the Sheriff under the directions of the Court, gets first priority and is paid back by the Sheriff to the Plaintiff as soon as the sale proceeds come into the Court. Therefore, the question of maintaining any vessel or paying the crew wages etc. does not arise at all. In law also, the Plaintiff can have no obligation to pay the crew salary or pay for maintenance of the vessel. When the Plaintiff itself has huge amounts to claim and moreover, if they are unsecured creditors or crew members, it would cause undue hardship to the Plaintiff and it will be very harsh on the Plaintiff if the Plaintiff is made to incur further costs and expenses.
41. At the same time, if the Plaintiff does not take steps on time and procrastinates, they cannot, without going through the office of the Sheriff of Mumbai, who is representative of the Court, but directly and voluntarily incur cost and expenses without prior sanction of the Court and claim to be paid first without having to prove the expenses incurred and the quantum, as sheriff''s expenses.
42. The submissions of the Plaintiff on this claim are totally unacceptable. The Plaintiff cannot arrogate to itself the power to do so what it pleases, more so, with regard to a property which is in the custody of the Court and disobey the orders of the Court and claim that that they should be paid off first. If the court accepts this view of the plaintiff then it would cause grave prejudice to all other claimants. The plaintiff may inflate the expenses or show bogus documents and take away the entire or major part of the sale proceeds without having to prove its claim and thereby defeat the claim of all other claimants including those who rank higher in priority like port or salvors or crew or mortgagees.
43. Therefore, the relief in prayer clause (c) sought in the Notice of Motion cannot be granted.
44. The Notice of Motion is rejected with costs. Coming to prayer clause (g) cost claimed by the Plaintiff, it is the Plaintiff who should be paying cost for taking out such an application. The Plaintiff is directed to pay a sum of Rs. 2,00,000/- (Rupees Two Lakh only) as cost to the 2nd Respondent within 14 days.
